Politics And Property In Thailand

Aug 10
07:51

2011

Tom Aikins

Tom Aikins

  • Share this article on Facebook
  • Share this article on Twitter
  • Share this article on Linkedin

The political ramifications of the recent election in Thailand, in regard to the business community, are still unclear especially when it comes to the property sector. Some things will remain constant – people still need places to live, and the residential market should remain more or less steady, at least among Thai people, said Antony Picon, Associate Director of Colliers Research Thailand.

mediaimage
The political ramifications of the recent election in Thailand,Politics And Property In Thailand  Articles in regard to the business community, are still unclear especially when it comes to the property sector. Some things will remain constant – people still need places to live, and the residential market should remain more or less steady, at least among Thai people, said Antony Picon, Associate Director of Colliers Research Thailand. Some foreigners may have found the political turmoil of recent years a bit unsettling, he said, adding that “it might take a little bit of time for foreigners to come back en masse.”  Picon emphasized concerns about stability, and said that many players are taking a wait and see approach over the next few months.Frank Khan, director of the residential department for international real estate firm Knight Frank, projected the next few months as being very important to demonstrate the stability of the new government, and noted that real estate is always one of the first industries impacted by political unrest. According to Khan, the “Bangkok property market all depends on the political situation,” especially for foreign investors. However, other markets, such as the resort town of Hua Hin, can find themselves more insulated than the capital in terms of the effects of political unrest. “Last time, Bangkok was burning but Hua Hin was still selling strong,” he said. With the American dollar still reeling, Khan identified regional players Hong Kong and Singapore upping their investment, in addition to increased speculation from the UK, Europe, Russia, and China.There are several government in effect and several under consideration that could impact the property market as well. One of these is the much-publicized zero percent interest loans that are being made available through the Government Housing Bank. Started just recently, as of the beginning of August (2011) almost 5,900 people have lodged applications for these special loans at the bank worth a combined total of 8.88 billion baht . Loans will be interest free for two years. The bank is making available 25 billion baht for the loan scheme.The program offers first-time homebuyers a mortgage loan at zero interest rate for the first two years for houses priced below three million baht with a full term of 30 years. The rate for subsequent years will be based on the bank's conditions. The bank will also pay the 1% mortgage fee and 2% transfer fee for customers. Applications will be accepted until the end of the year or until the credit line is used up.This project and others are designed to help boost home ownership among the lower to middle classes in the country and was part of the last government’s effort to attract votes from this segment, long a part of the Red Shirts camp here in Thailand whose main political party, Pheu Thai, is now in power. Also, helped by this measure, and potentially by other programs, are the property developers who wish to target this market segment. It remains to be seen how quickly the ruling party will now begin to solidify its support with the introduction of more measures to stimulate the economy.